Latest News and Topics of Interest: The rapid decline in long-term interest rates continued in December. Due to continuing actions by the Federal Reserve board, according to FreddieMac.com, the average cost of a 30 yr. fixed mortgage in the Western U.S. has dropped from 6.47% on 11/1/08 to 5.60% on 12/1/08 to 5.01% on 1/1/09. "Word on the street" is still suggesting 30 yr. mortgages at 4.50%, or less, soon. On the horizon: Expect Obama's stimulus package to include a provision, empowering bankruptcy judges with the ability to alter home loans in an effort to prevent foreclosures. The purpose of this is to get lenders to further engage in loan modifications and short sales, or the courts will do it for them.
National & Regional Snap-shot: What a difference a year makes: 1,872 homes sold in Sacramento County last month, a 219% increase in home sales when compared to December 2007. Of the 1,872 sales, 1,371 were bank owned (73%), 197 were short sales (10%) and the median home price rose 10% from $181k in November to $199k in December. 83% of the county's home sales were "distressed," making stiff competition and low odds of success for the average home seller.
Folsom: Folsom closed out 2008 with 50 home sales in December, including 21 foreclosure and 7 short sales. The inventory of homes available dropped to a low for the year to 239 homes. December had the highest percentage of distressed home sales for the year at 56%. The average home sales price dropped to $388,718, a 20% decline from the December, 2007 average. The average dollars per square foot fell to $189, a 13% drop from December, 2007.
El Dorado Hills: December was the weakest month in EDH in years with 35 sales, including 11 foreclosures and 7 short sales. The inventory of homes for sale dropped to a low for 2008 at 330. The average home sales priced rose 8% to $537k. The average dollars per square foot was $174, a 17% decline from December 2007.
Aaron's take on the markets: Reflecting on 2008, we saw a big drop in the stock market, employment, investor morale, consumer confidence and home prices. All of these factors helped the bottom fall out of the housing market in 2008, to the tune of a 20%+ decline in home values. Time is needed for all the government stimulus and falling interest rates to do their job, but when they do, the credit markets will loosen and home buyer confidence will rise. Although I do not see runaway appreciation returning, I do think we'll see prices stabilize in 2009. Considering falling interest rates, the tax benefits and possible appreciation, if you can find a home you love, and plan to stay 3+ years, early 2009 could be a great time to buy.
Personal note: I had the opportunity to see many of you over the holidays and I enjoyed the time. With the new year upon us, opportunity is abound and my nose is back to the grind-stone. If you ever want to chat, please give me a call.
Comments(0)